While there can be no question that a part of what has driven Apple's (NASDAQ: AAPL ) monumental success has been the quality and innovation of its products, it's also been fueled by the perception that Apple is cool. By creating a mystique that makes it the aspirational brand in technology, the company has created a rabidly loyal fan base that is not to be trifled with. A recent study conducted by Buzz Marketing Group as reported by BGR suggests that the tides may be shifting.
At the other end of the cool spectrum, Microsoft (NASDAQ: MSFT ) has long been written off as a lumbering juggernaut of corporate software, too stodgy to ever be cool again. This was not where you turned for the hot new thing. That same study equally suggests that Microsoft is back in the hunt.
The teenager paradox
According to the Buzz Marketing study of youths, "Apple is now too popular to be popular." Rather than trying to pretend to discern logic where none could possibly exist, let's agree that part of Apple's early popularity was that the company embraced the student demographic and, in doing so, created an almost anti-corporate ethos. Apple was never blatantly trying to be anti-enterprise, but by focusing on educational institutions and younger users, it achieved coolness as a side effect.
Since the fall of BlackBerry (NASDAQ: BBRY ) as the ultimate go-to device for business, Apple has very successfully filled the gap. Though the security and enterprise connectivity that made CrackBerrys not only indispensable but IT-friendly once ruled the day, iPhones and iPads have made significant inroads into enterprise applications. Even with the introduction of the new Z10 smartphone and BB10 OS, BlackBerry is on life support and Apple has benefited.
Buzz Marketing Group's Tina Wells explained: "Teens are telling us Apple is done. ... [They're] all about Surface tablets/laptops and Galaxy." Microsoft has a long way to go, but with appeal on the rise among the next critical buying demographic, the company and its shareholders should be thrilled with where things are heading.
Us older folks
The phenomena being observed among teens is also present among older generations, but to a lesser extent. According to a recent poll from Reuters/Ipsos, nearly half of the 18- to 29-year-old survey respondents reported that they consider Microsoft to be cooler now than a year ago. While the company edged out the two top social media companies, each of which scored below 50%, 60% of the same respondents said the Apple was cooler than it was a year ago, and 70% said Google's Android was cooler than a year ago. It is important, however, to keep these results in perspective.
Michael Gartenberg, an analyst at ga, said that the poll "definitely shows that Microsoft's efforts are paying off, but we'll have to see how cool translates into customers. It's also hard to compare 'cool' factor as a quantitative measure against Apple, a company, and Android, a platform." The takeaway from the survey, however, is not how the three companies stack up. Apple has been the reigning King of Cool for some time, and Google has had its eye of the prize for nearly as long. What is noteworthy is that after an extended hiatus, Microsoft is coming on strong.
Can I trade on cool?
Over the past several months, Microsoft has been a case of two competing stories. On the one hand, early sales projections, particularly for the Surface RT tablet and Surface Pro, have been light. It is nearly impossible to tell if these numbers are accurate or not, given the silence from Microsoft itself. On the other hand, there have been some very positive reviews of the latest device and rumblings that the company is making new enterprise inroads.
I remain extremely bullish on Microsoft and its re-emergence as a serious contender in the technology space. The company is not picking its battles, but launching an all-out war against its major competitors, and consumers are starting to notice. While teenagers are not a huge consumer group at present, I believe they are a fair leading indicator of where trends are heading. As Microsoft continues to deliver a broader and broader user experience, it will become increasingly sticky, much like that which exists with the Apple and Google ecosystems. Overall, Microsoft is doing what it needs to and should be in your portfolio.
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